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Minutes for HB2662 - Committee on Taxation
Short Title
Providing a sales tax exemption for purchases of construction materials by a contractor for the Kansas fairgrounds foundation.
Minutes Content for Mon, Feb 12, 2024
Chairperson Smith opened the hearing for HB2662.
Amelia Kovar-Donohue provided an overview for HB2662 that would provide a sales tax exemption for all sales of tangible personal property or services purchased by a contractor for the purpose of constructing, equipping, reconstructing, maintaining, repairing, enlarging, furnishing or remodeling a building that is operated by the Kansas Fairground Foundation and located on the grounds of the Kansas State Fair (Attachment 6). Ms. Kovar-Donohue stood for questions from Committee members.
Kathleen Smith provided an overview on the estimated State fiscal note for HB2662 that would decrease the state revenues by $188,000 in FY2025. Of that total, the State General Fund will decrease by $155,000 and the State Highway Fund will decrease by $33,000 in FY2025. Ms. Smith stated the Department of Revenue reviewed data from the Kansas Fairgrounds Foundation, which reports that its building project is estimated to be completed by the 2024 Kansas State Fair in September. Ms. Smith stood for questions from Committee members.
Representative Lisa Moser, 106th District, testified as a proponent for HB2662 stating it is a rare occurrence that a nonprofit organization utilizes every dollar it raises for the betterment of an entity owned by the state of Kansas. The mission of the Kansas Fairgrounds Foundation is to preserve and improve the Kansas State Fairgrounds. It was revealed when a contractor purchased material for a project there was no sales tax exemption in place, though the foundation is a 501(c)3 non-profit. HB2662 is a sales tax exemption for the Kansas Fairgrounds Foundation (Attachment 7). Representative Moser stood for questions from Committee members.
Representative Michael Murphy, 114th District, testified as a proponent for HB2662 that is a tax exemption for the State Fair Foundation is a non-profit organization who improves and enhances the State Fair and the facility that benefits the area for the entire year, not just during the ten days of the State Fair (Attachment 8). Representative Murphy stood for questions from Committee members.
Mary McCurry, Chairman of the Board, Kansas Fairgrounds Foundation, testified as a proponent for HB2662. Ms McCurry provided background and historical information regarding the Kansas Fairgrounds Foundation (Attachment 9). Ms. McCurry stood for questions from Committee members.
James Fisher, Executive Director, Kansas Fairgrounds Foundation, testified as a proponent for HB2662 providing a project summary and work for the 1861 Club (Attachment 10). Mr. Fisher stood for questions from Committee members.
Brad Rayl, Director, Kansas Fairgrounds Foundation, testified as a proponent for HB2662 noting the Kansas Fairgrounds Foundation holds a sales tax exemption certification from the State of Kansas. The certificate allows the Foundation to be exempt from paying sales tax on items directly purchased by the Foundation. He noted on larger multi-million dollar projects that is managed by a general contractor for the Foundation, under current Kansas law, the Kansas Fairgrounds Foundation does not qualify for and is unable to secure a project exemption and are required to pay sales tax (Attachment 11). Mr. Rayl stood for questions from Committee members.
Written testimony was submitted by Paula Landoll-Smith, Kansas State Fair, as a proponent for HB2662 (Attachment 12).
There was no testimony submitted as neutral or opponent to HB2662.
Chairperson Smith closed the hearing for HB2662.
As requested in the February 8, 2024 House Taxation Committee meeting, following is the link provided by Adam Siebers, Assistant Revisor, for the Attorney General's opinion (95-18) dated February 6, 1995 regarding System of Taxation, Classification, Recreational Vehicles, Application to Houseboats. https://ksag.washburnlaw.edu/opinions/1995/1995-018.htm
There being no further business the meeting was adjourned.
